🚀 Does Momentum Investing Work on Funds?

[ModestInvestor]

🚀 Does Momentum Investing Work on Funds?

Momentum investing is simply a strategy whereby you buy investments such as stocks that have performed well and sell the investments which have performed poorly. The idea behind it is that you catch trends when they are rising and are out when they are falling.

📈 There are many ways of deciding when to enter the trend such as technical indicators including moving averages. In this test we are looking simply at reviewing the best performers on an annual basis in the hope that they will continue this in the next year.

moneysandi.com/does-momentum-investing-work-on-funds/

Figures are a few years old, but still relevant. Let me know your thoughts.

[tentacleskilt]

I'm curious, what is the efficacy of momentum investing in the realm of fund management, dissecting both its potential benefits and inherent risks? I am thinking about the underlying rationale and assumptions of momentum investing, evaluating their validity in the face of real-world market dynamics, discerning the influence of market psychology, herding behavior, and mean reversion on the success of momentum investing strategies...

[ModestInvestor]

Good luck, I'd love to hear what you find. My small piece of research showed that it's often not a good strategy to follow momentum, however some people do profit from greater fool theory. I believe, have found and have read of mean reversion opportunities that are sensible and profitable. I have personally found mean reversion in funds/trusts to be more profitable than momentum investing.

[tentacleskilt]

Got you, that sounds really good, thx!